I wonder what his reason for dropping the bid is?

Universal's music catalog is the largest of the 5 major labels. Without that, Davis would lose out on a very lucrative piece of the entertainment pie.

It was the biggest one-day percentage drop for the stock since last July."

Apple had $4.46 billion in cash and short-term investments on its balance sheet as of the end of last year, or about $12.50 in cash per share, a major draw for value investors.

"People worry that if part of that ... cash hoard disappears because Vivendi wants money to reduce debt, that's a big problem," said Dan Niles, an analyst at Lehman Brothers. "That cash balance is what has been holding the stock up."

Analysts also questioned why Apple, founded and run by legendary technology figure Steve Jobs, would want to own music assets when it could simply license the content for the online service it is reportedly developing.

A school district with which I was formerly affiliated bought over 100 eMacs late last year. Over half of them have suffered a video-card burnout, and have been shipped back to Apple. The person is charge is planning to pre-emptively send back ALL of the eMacs and get a replacement. This has not soured Apple's reputation in his mind, because he is an Applephile through and through...but it has tarnished its reputation forever for many people that I know. I will not willingly buy any Apple product for quite some time. Every (other) district that I know of his running pell-mell to Dell, with a smattering of Gateway. HPaq and IBM are no longer even in the picture.

Some more thoughts from the education front...

Certainly not the Reuters story you linked to! This MacNN article grossly mischaracterizes the Apple / Universal Music situation by unfairly editorializing, presenting readers with manufactured information that's not supported by facts. The fact that Marvin Davis would withdraw his bid for all VUE assets if Apple buys Universal Music (duh!) does not necessarily -- in any way, shape or form -- "jeopardize" Apple's bid. Quite the contrary, it presents Vivendi Universal the option of not having to throw the baby out with the bathwater; that is, if they _just_ sell Universal Music to Apple, they may no longer need to sell the rest of their entertainment assets, rendering Davis' bid moot. Furthermore, Apple's stock dropped today because no one has yet heard Apple's side of this story -- and their quite possibly sound and even visionary reasons for wanting to make this purchase. Instead, MacNN and the rest of the press are generating rampant speculation and fear based on ignorance of the real situation. Shame on you, MacNN!

$5 lower and it may be actually worth buying Apple stock.
In general, I say buy at $8, sell at $10-$11.